Ronald J. Schaefer, Jr.'s (Schaefer) auto would not start. It was towed to Paretti Imports, Inc. (Paretti) at about 6:00 p.m. on August 26, 2005 and placed in its outdoor lot. When it became evident that Hurricane Katrina would strike the New Orleans metropolitan area, Paretti's staff moved a number of its new cars to the same lot because it had never flooded in at least 30 years and was entirely fenced, affording additional protection from wind damage. However, the lot did flood, causing water damage amounting to 1.7 million to Paretti's new vehicles as well as a total loss to Schaefer's vehicle that had no comprehensive coverage. Schaefer sued Paretti to recover the value of his loss.
The district court examined the details and ruled that, even though Paretti was a compensated depositary, it was neither negligent in caring for Schaefer's vehicle nor liable for the damage to it. While Schaefer met the burden of proving that the vehicle was returned damaged, Parotti exonerated itself by demonstrating that it had acted prudently and diligently by leaving the vehicle in an enclosed lot that had not flooded in at least 30 years. Schaefer appealed.
On appeal, both parties agreed that Paretti was a compensated depositary. A gratuitous depositary must exercise only that degree of care that it takes for its own property while an onerous depositary must proceed with diligence and prudence. When a deposit is not returned, or is returned damaged, it is presumed that the depositary was negligent. However, the depositary may then show that it was not in fact negligent. In addition, the depositary is not an insurer of the thing deposited and may exonerate itself by demonstrating that it took reasonable care to protect against foreseeable damage. The appellate court concluded that the damage caused by Hurricane Katrina was not only unforeseeable but also unprecedented, and that Paretti was not negligent in handling the deposited vehicle.
Schaefer argued that, because Paretti treated his vehicle with only the same care that it treated its own vehicles by placing them in the same lot, it should have been exonerated only if it was a gratuitous depositary. Since it was an onerous depositary, it should have been found liable for not taking better care of his vehicle than it did its own. The appellate court agreed with the argument to some extent but disagreed with its basic premise, which is actually that an owner cannot exercise diligence and prudence in caring for his own things. It noted that the particulars of this case demonstrated that Paretti acted reasonably in placing Schaefer's vehicle in a fenced lot never known to have flooded. The fact that it placed its own vehicles in the same lot does not change the reasonableness of its actions with respect to Schaefer's property.
Schaefer then argued that, since other vehicles left at Paretti's for repair that were kept in the enclosed shop escaped flooding, Paretti was negligent in not bringing his vehicle into that area as well. The appellate court also rejected that argument, stating that the issue at hand was whether Paretti acted prudently as the storm approached, not whether in hindsight its actions were not the best course of action.
Schaefer's last argument was that Paretti should have notified him to pick up his vehicle and remove it to a safe place. This reasoning was also rejected, the court noting that Schaefer was in as good a position to assess the potential danger of the approaching storm as Paretti. He could have sent a tow truck to pick up the vehicle and removed it to higher ground if he thought the entire area might flood. The fact that Paretti did not do so did not render its actions any more or less reasonable than Schaefer's.
For all these reasons, the court of appeal affirmed the trial court's judgment in favor of Paretti.
Court of Appeal of Louisiana, Fifth Circuit. Ronald J. Schaefer, Jr. v. Paretti Imports, Inc. and XYZ Insurance Company. No 08-CA-486. Oct. 28, 2008. 997 So.2d, 619, 08-486 (La.App. 5 Cir. 10/28/08)